Forex News: Yen Rises Amid BoJ Rate Hike Speculation

Yen Rises Amid BoJ Rate Hike Speculation

(RTTNews) - The Japanese yen strengthened against other major currencies in the Asian session on Tuesday, as traders speculate that the Bank of Japan or the BoJ is likely to increase its interest rate in the policy meeting held this week.

Markets fully anticipate that the BOJ will hike interest rates by a quarter point on Friday, with the majority of attention focused on Governor Kazuo Ueda's post-meeting press conference for hints on the direction of policy in 2026.

In economic news, data from S&P Global showed that Japan's composite index continued to expand in December, albeit at a slower pace, the latest survey revealed on Tuesday with a composite PMI score of 51.5. That's down from 52.0 in November.

The survey also showed that the manufacturing index improved to 49.7 from 48.7 in November, while the services PMI fell to 52.5 from 53.2.

Investors waited for more clarity on the U.S. economic and rate outlook.

The delayed monthly jobs report for November along with the October retail sales report will be in the spotlight today, while the consumer price index for November is scheduled to be released on Thursday.

The data could impact the outlook for interest rates after the Federal Reserve's monetary policy meeting last Wednesday showed significant differences of opinion about further rate cuts.

In the Asian trading today, the yen rose to a 1-week high of 181.79 against the euro, an 8-day high of 206.77 against the pound and a 6-day high of 194.27 against the Swiss franc, from yesterday's closing quotes of 182.43, 206.62 and 194.96, respectively. If the yen extends its uptrend, it is likely to find resistance around 180.00 against the euro, 205.00 against the pound and 192.00 against the franc.

Against the U.S. and the Canadian dollars, the yen advanced to nearly a 2-week high of 154.69 and an 8-day high of 112.36 from yesterday's closing quotes of 155.22 and 112.73, respectively. The yen may test resistance near 153.00 against the greenback and 110.00 against the loonie.

Looking ahead, PMI reports from various European economies and U.K. for December, German ZEW economic sentiment index for December are due to be released in the European session.

In the New York session, U.S. jobs data for November, retail sales for October, U.S. S&P Global manufacturing PMI for December are slated for release in the New York session.

For comments and feedback: contact editorial@rttnews.com

Copyright(c) 2025 RTTNews.com. All Rights Reserved

Market News provided by RTTNews